The High Costs of Travel Visas

U.S. citizens are fortunate in that most European and South American countries no longer require a visa for US travelers. It’s surprising, however, how many countries continue to make it difficult to visit. Some countries don’t want visitors, of course, but even a country like India, a democracy that relies a lot on tourism, still requires costly and time-consuming visas. A new paper from Robert Lawson and Saurav Roychoudhury estimates that the cost of these restrictions can be quite large.

Using a travel visa data set developed by Lawson and Lemke (2012) and travel flow data from the World Bank and the UN’s World Tourism Organization (UNWTO), we investigate the deterrent effect of travel visa requirements on travel flows. At the aggregate level, a one standard deviation more severe travel visa regime, as measured, is associated with a 30 percent decrease in inbound travel. At the bilateral level, having a travel visa requirement on a particular country is associated with a 70% reduction in inbound travel from that country. The gains associated with eliminating travel visas appear to be very large.

Oh for the days prior to 1914 when Keynes wrote that a person could travel “without passport or other formality” throughout much of the world.


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